Treatments for rare diseases have generally been able to avoid the most aggressive payer management strategies, like step therapy. Chalk up this immunity to limited treatment options for these diseases, relatively few patients needing treatment for them, and vocal advocacy communities. So when pharmacy benefit managers introduced exclusion lists earlier this decade, it wasn’t much of a surprise that rare diseases were virtually absent from them.

That immunity is being challenged. In 2017, CVS Caremark began excluding drugs in the chronic myelogenous leukemia category. Patients who want to use excluded drugs may be required to pay full cost unless an exception is allowed, which often requires the patient to try a preferred drug — and fail on it — first.

The limited incidence of rare diseases in a commercially insured population, coupled with applying the exclusions only to new patients and allowing existing users to continue using the excluded drugs, made the CVS Caremark move somewhat symbolic. Even so, it meant that a pharmacy benefit manager was able to make exclusions in oncology, the quintessential sensitive-disease category, with minimal noise.

If CVS’s move was a shot across the bow of rare diseases, the move by Express Scripts earlier this month was a direct hit. It added hemophilia, hereditary angioedema, and HIV to the list of categories with excluded drugs. All three diseases have patient populations that skew young (under 65 years of age), and even though Express Scripts allows patients who are current users to be grandfathered in, the move is aggressive.

Rare disease companies may now be asking, “How did we get here?”

The origin of exclusion lists lies in pharmacy benefit managers’ ongoing efforts to extract rebates, which are then passed to employers and health plans to lower the cost of the prescription drug benefit. Perhaps dissatisfied by the results of conventional step therapy, CVS launched the first exclusion list in 2012 that listed 38 products across 18 categories. Express Scripts joined the fray in 2014 by excluding 48 products across 19 categories. By 2016, the four other large players — Cigna, Aetna, Optum, and Prime Therapeutics — had released their ownexclusion lists.

Despite the diversity of players, the disease categories on these lists were similar and focused on primary care medication classes such as diabetes, cardiovascular disease, lung disease, and pain. Drugs for rare or complex conditions on these exclusion lists were either from drug classes with many options, such as autoimmune disease and multiple sclerosis, or those in which biosimilars were available. Even then, these specialty categories weren’t on exclusion lists for every pharmacy benefit manager.

Express Scripts’ rationale behind its move in the rare disease space may be partially explained by recent trends. Spending on specialty drugs — these are generally high-cost prescription medications used to treat complex conditions that may require special handling and administration as well as careful oversight — continues to grow rapidly. Express Scripts’ 2017 trend report estimated that specialty drugs accounted for 40.8 percent of the company’s drug spending. That report also showed that HIV had the fifth-largest growth in spending, 13.7 percent, driven almost entirely by new brand medications, with double-digit trend growth expected to continue at least through 2020.

Hemophilia and hereditary angioedema did not appear in Express Scripts’ trend report. But they did show up in Magellan’s Medical Pharmacy Trend Report, among the top 25 categories by spending. Since such reports are widely read by pharmacy benefit managers’ clients, categories listed in these reports are scrutinized with the expectation that PBMs will have solutions on how to deliver more savings.

Express Scripts likely felt that competition in these rare disease categories had reached a high enough level that some agents could be excluded without significantly affecting patient access to clinically comparable therapy.

What does the future hold for rare diseases and exclusion lists? Their presence in such lists is likely to expand, both in the number of categories and the number of drugs within these categories.

Spending on specialty drugs is approaching 50 percent of all drug spending, and rare disease categories play a significant role in that growth. For a pharmacy benefit manager, managing that spending means aggressively managing rare disease.

If Express Scripts is successful in generating more savings in rare disease drug categories through exclusion, other pharmacy benefit managers will surely follow suit. Clients tend to ask their pharmacy benefit manager hard questions when a competitor PBM is doing something that the client’s is not. This compels the industry to adopt the successful practices of their competitors. As the drug price debate rages and patients are responsible for ever-greater shares of the cost, the acceptance of limits to access is likely to grow, particularly with high-cost drugs.

I see four ways that rare disease manufacturers can help mitigate the risk of their drugs showing up on exclusion lists:

Don’t assume that a category is too small for a payer to notice or manage. Even if the condition is ultra-orphan, the presence of comparable competitive agents means that exclusion is possible.

Watch pharmacy benefit manager trend reports. They provide insight into what categories PBMs are watching. The appearance of a rare disease in a trend report should be worrisome; a special callout of a category should be cause for alarm.

Don’t assume that a pushback from providers and patients will peel back restrictions. Market trends indicate that pharmacy benefit managers are willing to weather significant pushback and stay the course.

Differentiate! Pharmacy benefit managers have incentives to lump drugs together. It’s the manufacturer’s job to pull apart the category by demonstrating the clinical and economic differentiation of its agent.

Truly unique products should have protection. Rare disease manufacturers need to prove how exceptional their products are — or risk ending up on formulary exclusion lists.

Jeremy Schafer is senior vice president at Precision for Value.

Precision Medicine Group is an integrated team of experts in fields from advanced lab sciences to translational informatics and regulatory affairs, payer insights to marketing communications. Together, we help our pharmaceutical and life-sciences clients conquer product development and commercialization challenges in a rapidly evolving environment.

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